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Habits are tough to form! I recently got into the habit of flossing regularly after working on it for some time. I know… That’s gross, right? But the fact that it was gross was not what kick-started my habit. I was well aware of the long term benefits of flossing and the downside of not. I wanted to do it, but something was missing.

I am tasked with putting our 2 1/2 year old son to bed most nights. I bathe him, brush his teeth, put on his PJ’s, we read 2 books, and I tuck him in for bed. Recently, my wife asked that I start flossing his teeth every night.

Fortunately, my wife bought the floss that’s on the stick – it’s really easy to use! Plus, he has like 10 teeth. So we began flossing every night… But he always wanted me to do it with my teeth while he attempted to do it on his. So I did. All of a sudden, within a few weeks I unknowingly formed the habit myself while teaching him. Now I floss everyday – cannot go without it.

Forming Habits

I was thinking about this today and realized that’s exactly how forming the habit for anything works – including managing your money.

How did I form the habit? I set a goal to floss. And visualized the long term benefits and risks. I put myself in position to succeed (unintentionally) by involving other people that are influential to me. My son asked me to practice what I was preaching. That was enough to get me through the 20-30 days of forming the habit. And bam – now we’re in business!

Flossing And Money

One of the most basic habits in managing your money is keeping track of it. How much are you making vs spending? What is your net worth (assets and debts) and how is it changing over time? I would consider these like the flossing of personal finances.

And like flossing, many people don’t keep track of their money like they know they should. The trick is learning how to form new habits quickly. You have to be intentional about it, otherwise complacency is inevitable.

Applications To Money

1) Set Your Goal
This is a necessary first step. But, if all you do is set the goal, success is unlikely. Start by setting a small and achievable goal.

A good initial goal is just taking the time to track your money each month. Where does it go? Don’t worry about reinventing the wheel with a tracking system – we have a system you can use to start that won’t eat up all your time!

2) Visualize Your Future
Think about how great your life will look if you hit the goal. Also consider the downside of not hitting the goal.

If your goal is to begin tracking your money, visualize how you will feel when you have control over your money. Think about the low stress lifestyle and the impact it will have on your life. Then consider the downside of changing nothing – the stress doesn’t go away… it actually builds. Do you want to be like this the rest of your life? Do you want to teach your children these poor habits?

3) Put Yourself In Position To Succeed
Create an environment around you that helps your chances of success. Examples include…

  • Involve other people. Share your goal with someone that’s important in your life. Grow together.
  • Make it easy. Position all the steps so they are as easy as possible. It’s about forming the habit first!
  • Teach someone the skill. Especially if you already know the skill but need to restart the habit – teach someone else! It forces you to be on your game!
  • Schedule the time! Not everyone has a lot of spare time. If it’s important, you have to carve it out on the calendar now.
  • Don’t Give Up! The hardest part is forming the habit. It does NOT have to be perfect. Early on, focus on forming the routine and don’t worry about perfection! Once you form the habit, you will have plenty of time to work on fine tuning.

Remember that habit formation is essential whether it be flossing or managing your money. Forming the habit consists of setting your goal, visualizing your future, and creating an environment for success.

The first step is essential.

Take 2 minutes now to sign up for our free money tracking spreadsheets and give it a try! You can download them here, at the top of our main page. Let us know in the comments how it’s going or questions you may have.

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Wrenne Financial Planning LLC (“WFP”) is a registered investment adviser with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. All written content on this site is for information purposes only. Opinions expressed herein are solely those of WFP, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.